Association of Merger Dealers, LLC v. Tosco Corp.

167 F. Supp. 2d 65, 2001 U.S. Dist. LEXIS 16962, 2001 WL 1222578
CourtDistrict Court, District of Columbia
DecidedSeptember 26, 2001
DocketCIV. 01-0978(TFH)
StatusPublished
Cited by12 cases

This text of 167 F. Supp. 2d 65 (Association of Merger Dealers, LLC v. Tosco Corp.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Association of Merger Dealers, LLC v. Tosco Corp., 167 F. Supp. 2d 65, 2001 U.S. Dist. LEXIS 16962, 2001 WL 1222578 (D.D.C. 2001).

Opinion

MEMORANDUM OPINION

HOGAN, Chief Judge.

Pending before the Court is the defendant’s motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and (6). This case involves a dispute as to whether the parties had a contract, and it is before the Court via diversity jurisdiction. Plaintiff Association of Merger Dealers, LLC (“AMD”) is a non-profit firm that was formed to represent the interests of individual Exxon- and Mobil-branded gas station lessees (“dealers”) after Exxon Corporation (“Exxon”) and Mobil Oil Corporation (“Mobil”) announced their intent to merge. In this lawsuit, AMD seeks to enforce a purported promise made by Defendants Tosco Corporation, Tosco Marketing Company, and Tosco Refining (collectively “Tosco”) 1 to AMD to sell the *67 stations to the dealers for their current-use values as gas stations. This promise was allegedly made by Tosco in its successful effort to acquire the stations, which were divested as part of the FTC’s consent agreement with Exxon and Mobil. Tosco challenges AMD’s standing and capacity to bring this lawsuit as well as the validity of AMD’s promissory estoppel and breach-of-contract claims. Upon careful consideration of the motion, the opposition and reply thereto, the hearing held on August 21, 2001, and the entire record herein, the Court will grant the motion and dismiss this case.

I. BACKGROUND 2

On December 1, 1998, Exxon and Mobil announced their intention to merge into a single company to be named “ExxonMo-bil.” Compl. ¶ 9. Following that announcement, various Mobil and Exxon retail service station dealers formed Plaintiff AMD, a not-for-profit Maryland limited liability company (“LLC”), to promote their common business interests with respect to the merger. Id. ¶ 3. 3

After the announced merger, the Federal Trade Commission (“FTC”) expressed antitrust concerns and considered litigating to prevent its execution. Id. ¶ 11. By Fall 1999, the FTC determined that divestiture of retail sites on the east coast would be required to address their concerns and settle the matter. It then solicited input from AMD and other dealer groups regarding potential purchasers of the divested assets and recommended that the dealers speak with potential bidders. AMD conferred with Sunoco, Inc., Amera-da Hess Corporation, Crown Central Petroleum Corporation, Getty Petroleum, Irving Oil Corporation, Dag Petroleum Companies, and Defendant Tosco concerning demands of the dealers that would need to be met in order for the dealers to forego legal action on issues arising out of the intended merger and the sale of divested assets. Id. ¶ 14.

In early November 1999, AMD representatives and others began communications with Tosco and the FTC, seeking assurances that if Tosco purchased the divested assets, Tosco in turn would offer the dealers the properties at a price based on continued service station use valuations. Tosco agreed to provide the dealers with that right. Id. ¶ 15. On November 30, 1999, the FTC announced that a consent agreement had been reached with Exxon and Mobil to settle the antitrust issues raised by the merger, and a sixty-day study and comment period was to follow. As part of the agreement, approximately 1,740 retail service stations were to be divested. Id. ¶ 16. 4 On December 2,1999, Tosco announced its agreement with Exx-onMobil to acquire the divested stations, with the closing scheduled for March 1, 2000.

*68 Following the announcements of the FTC’s consent agreement and Tosco’s deal to acquire the divested stations, AMD continued to seek assurances that its dealers would receive the right to purchase their properties from Tosco under a current-use valuation, and the dealers made Tosco aware that they would take all necessary legal, political, and public relations measures necessary to insure they obtained their purchase rights. Id. ¶¶ 18-19. From early November 1999 to February 28, 2000, Tosco repeatedly communicated to AMD and to the FTC, orally and in writing, its agreement to provide the dealers with the right to purchase the divested stations at prices based on current-use values. 5 It further represented that it would make all the offers between March 15, 2000 to June 1, 2000. Id. ¶ 20. 6

On March 1, 2000, Tosco acquired the divested stations from ExxonMobil for $860 million and became the franchisor, landlord, and/or supplier to the Exxon and Mobil dealers at those stations. Id. ¶ 23. 7 In May 2000, Tosco made offers to various dealers, offering to sell the station assets to those dealers in conjunction with a continued long-term supply agreement of fifteen years. However, Tosco offered the properties at inflated prices based upon valuations other than the agreed-upon current-use valuations. In some cases, the offer was more than $1 million higher than the current-use market value of the particular station. Id. ¶ 24. 8

AMD then filed this lawsuit, asserting two counts against Tosco. Count One avers a claim of promissory estoppel: in detrimental reliance on Tosco’s unfulfilled promise to offer to sell the divested stations to their respective dealers for their current-use value, AMD and its members forewent litigation to stop the transfer of the stations to Tosco and provided support to Tosco in its effort to purchase the di *69 vested stations. Id. ¶¶ 26-31. 9 Count Two alleges breach of contract: Tosco has failed to perform its promise to offer to sell the stations for their current-use value, which was made in exchange for valuable consideration in the form of both foregone litigation and affirmative support in Tosco’s effort to acquire the stations. Id. ¶¶ 32-36. AMD seeks specific performance and price reformation of prior defective offers. Id. at 11.

Tosco has moved to dismiss the complaint, claiming that this Court lacks subject matter jurisdiction over the case and alternatively that the complaint fails to state a claim upon which relief may be granted. See Fed.R.Civ.P. 12(b)(1), (6).

II. DISCUSSION

A. Legal Standard

In considering a motion to dismiss for lack of subject matter jurisdiction, the Court accepts as true all material factual allegations in the complaint. Hohri v. United States, 782 F.2d 227, 241 (D.C.Cir.1986), vacated on other grounds,

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167 F. Supp. 2d 65, 2001 U.S. Dist. LEXIS 16962, 2001 WL 1222578, Counsel Stack Legal Research, https://law.counselstack.com/opinion/association-of-merger-dealers-llc-v-tosco-corp-dcd-2001.